SC helps STC get back INR 2,210 crore dues from Global Steel

Steel News - Published on Tue, 11 Dec 2018

Times Of India reported that it took the Supreme Court three years to reverse a Delhi High Court order and ensure that state-owned State Trading Corporation got back INR 2,210 crore from two steel companies, one registered in Isle of Man and the other in Philippines, for raw material supplied to them. A bench of Justices A M Sapre and Indu Malhotra noted that as against the principal sum of INR 1,610 crore due to STC from Global Steel Holdings (GSH) and Global Steel Philippines both headed by Pramod Mittal, the defaulters had paid only INR 800 crore following a settlement between the three parties. Mittal had given a personal guarantee in 2012 for payment of the dues by GSH and GSP.

When the companies failed to honour the agreement, STC had moved the Delhi HC for its enforcement. The HC dismissed the execution petition in 2015 on the ground that neither GSH nor GSP were located within the jurisdiction of the HC. After the SC entertained STC’s appeal against the HC order based on arguments advanced by senior advocate Dushyant Dave and counsel Uday Gupta, the two foreign registered steel companies, through senior advocate Kapil Sibal, informed the court that pursuant to the agreements of 2010 and 2012, GSH and GSP had paid INR 810 crore and expressed readiness to deposit INR 800 crore in bank guarantee till the issue was decided by the apex court.

The bench of Justices Sapre and Malhotra said that “Since parties have requested termination of these proceedings in this appeal itself, and since outstanding dues have already been cleared by respondents during pendency of this appeal, though late, leaving only a limited controversy alive regarding payment of interest, we are of the considered opinion that there is no legal impediment in deciding the issue of payment of interest and its rate in this appeal finally to give quietus to this litigation.”

The bench ruled that GSH and GSP were liable to pay interest on principal sum of INR 1,610 crore at 8% per annum from November 2012. However, it applied simple interest on the principal amount and quantified the interest amount at INR 600 crore. The court ordered payment of INR 800 crore deposited by the two companies to STC and asked them to pay another INR 600 crore by February 28, 2019. The bench said that “If the amount of INR 600 crore is not paid to STC on or before February 28, then it would amount to contempt of the order passed by the Supreme Court.”